Study explains how to stop the union ‘dues skim’ of federal money

May 10, 2017

Contact:Chantal LovellCommunications Manager989-698-1914

Midland — Millions of federal funds meant to aid disabled individuals and low-income families are being inappropriately diverted before reaching the vulnerable populations they’re intended to help. These funds are being skimmed away by unions claiming that they’re entitled to these dues. Ensuring that money from federal assistance programs like Medicaid reach the needy should be of highest aim, and a new policy brief recommends ways to end this “dues skim” and increase support for Americans with disabilities and low-income families.

How to Stop the ‘Dues Skim’ of Federal Home Health Care and Child Care Funding — published today by the Mackinac Center for Public Policy — explores the ongoing, national problem of dues skimming and recommends how to end it. These arrangements divert money away from health care and child care providers, who receive modest government stipends for taking care of family members, neighbors or friends in their own homes.

“When most people think of union members, they think of factory workers or government employees, not a mother caring for her disabled son,” said F. Vincent Vernuccio, director of labor policy at the Mackinac Center. “For a union to quietly ‘organize’ family members and take precious money that is intended to improve the lives of our country’s most vulnerable people is wrong, and the federal government must put an end to it once and for all.”

Each year, the federal government spends hundreds of millions of dollars through Medicaid, Temporary Assistance for Needy Families and the Child Care and Development Fund to pay for in-home caregivers. Most of these caregivers are close family and friends of low-income individuals who either have an illness or disability, or need help with child care.

Money from all three programs is meant to help improve the lives of those in need. But over the last decade, unions — particularly the Service Employees International Union — have quietly unionized in-home caregivers. By calling them public employees (because they are paid via public assistance programs), unions have devised an arrangement that allows them to skim millions of dollars annually from the country’s most vulnerable in the name of union dues.

“In many cases, in-home caregivers don’t even know they’re represented by a union, so the likelihood that they receive any benefit is slim to none,” said Vernuccio. “Worse than these caregivers being forced to pay dues to a union is the fact that this money could and should be spent on improving the lives of those in their care. Dues skimming is taking money away from the needy and vulnerable.”

In 2014, the Supreme Court ruled in favor of in-home caregivers in the case of Harris v. Quinn, giving them the opportunity to opt out of union membership and stop paying dues to unions. But, dues skimming is still occurring, sometimes without caregivers’ knowledge.

As the study recommends, the federal government can act to finally end this arrangement and ensure funds reach the intended recipients. The Secretary of Health and Human Services, Tom Price, could simply issue a letter clarifying that all Medicaid payments must go directly to service providers with no deductions. States failing to comply would lose funding for the program. HHS could also implement new rules prohibiting Medicaid and other assistance funds from being used to pay for union fees or dues. Individual caregivers, of course, could still freely join a union — they just would have to pay the union dues out of their own pocket rather than out of funds meant for disabled and low-income Americans.

“Caring for the sick and needy is critical,” Vernuccio said. “People who take on those roles should not be forced to subsidize union activities that do not benefit the vulnerable in their charge.”